On January 1, 2019, Mid Penn adopted FASB Topic 842, Leases, and all subsequent ASUs that modified Topic 842, which primarily affected the accounting treatment for operating lease agreements in which Mid Penn is the lessee. As of the January 1, 2019 adoption date, Mid Penn leased twenty-four branch locations under non-cancelable operating leases, which expire at various dates through the year ending December 31, 2035. Three of Mid Penn’s operating leases are with related parties. Subsequent to the adoption of Topic 842, Mid Penn entered into a lease agreement for one facility under a non-cancelable finance lease, which commenced March 1, 2019 and expires February 28, 2039.

In 2016, Mid Penn entered into a subleasing agreement with an unrelated party on one of its properties under an operating lease. The sublease included an escalation clause. The initial term of the sublease agreement began on July 1, 2016 and ended on March 31, 2021, and was extended for an additional one-year term ending March 31, 2022.

Operating and finance lease right-of-use assets, as well as operating lease liabilities, are presented as separate line items on the Consolidated Balance Sheet, while finance lease liabilities are classified as a component of long-term debt. Mid Penn has elected not to include short-term leases (i.e., leases with initial terms of twelve months or less) or equipment leases (deemed immaterial) on the Consolidated Balance Sheets.

There were no sale and leaseback transactions, leveraged leases, or leases that had not commenced as of June 30, 2021.

Below is a summary of the operating and finance lease right-of-use assets and related lease liabilities, as well as the weighted average lease term (in years) and weighted average discount rate for each of the lease classifications as of June 30, 2021 and December 31, 2020.

(Dollars in thousands)	June 30, 2021						December 31, 2020
	Operating Leases			Finance Lease			Operating Leases			Finance Lease
Right of use asset	$	10,364		$	3,177		$	10,157		$	3,267
Lease liability	$	11,387		$	3,424		$	11,200		$	3,467
Weighted average remaining lease term (in years)		7.65			17.67			8.05			18.17
Weighted average discount rate		3.16	%		3.81	%		3.30	%		3.81	%

A summary of lease costs during the three and six months ended June 30, 2021 and 2020 are presented below. Interest expense on finance lease liabilities is included in other interest expense, while all other lease costs are included in occupancy expense on Mid Penn’s Consolidated Statements of Income.

(Dollars in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Finance lease cost:
Amortization of right-of-use asset	$	45		$	45		$	90		$	90
Interest expense on lease liability		32			33			65			67
Total finance lease cost		77			78			155			157
Operating lease cost		511			505			1,027			1,033
Short-term and equipment lease cost		7			12			17			21
Variable lease cost		—			—			—			—
Sublease income		(6	)		(4	)		(15	)		(10	)
Total lease costs	$	589		$	591		$	1,184		$	1,201

A summary of cash paid for amounts included in the measurement of lease liabilities is presented below.

(Dollars in thousands)	Six Months Ended
	June 30, 2021		June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	65	$	67
Operating cash flows from operating leases		1,048		1,064
Financing cash flows from finance leases		43		41

A maturity analysis of operating and finance lease liabilities and a reconciliation of the undiscounted cash flows to the total operating and finance lease liability amounts is presented below.

(Dollars in thousands)	June 30, 2021
	Operating Leases			Finance Lease
Lease payments due:
Within one year	$	1,032		$	108
After one but within two years		2,061			217
After two but within three years		1,815			217
After three but within four years		1,760			252
After four but within five years		1,373			259
After five years		4,810			3,733
Total undiscounted cash flows		12,851			4,786
Discount on cash flows		(1,464	)		(1,362	)
Total lease liability	$	11,387		$	3,424